Lost Time = Lost Business: Claims Management vs. Claims Avoidance

Workers’ compensation claims are expensive in more ways than one. Not only can they result in an increase in employer’s premiums and consequently lost efficiency due to absenteeism, but they can also cost the company future contracts. This is because the company’s safety record is often used to pre-qualify them in the bidding process. In the construction industry for example, a company’s workers’ compensation rating is an extremely important factor in their ability to win contracts.

Given the importance of this rating to the company’s profitability, it can be tempting for businesses to downplay the severity of their claims, and in some cases, to avoid claims altogether. In this article, we will discuss why this is ultimately not a good idea and what businesses can do to legitimately reduce their amount of compensation claims.

Claims Avoidance

According to two different Canadian surveys, it is estimated that approximately 7-8% of plausibly compensable workplace injuries and illnesses are not reported to the Board. When corporations, CEO’S, VP’s and owners are charged and convicted with claims avoidance and other violations, the WSIB and WCB register and publish these results.

The most common violations include but are not limited to:

Failure to notify the Board within 3 days of learning of the injury;

Making false or misleading statements regarding worker entitlement; and

Suppression actions against employees including pressure not to submit (or to withdraw) claims, providing false information, under-reporting severity and wage continuation (in place of filing a claim).

By avoiding a workers’ compensation claim, both the employer and employee are taking on a huge risk. In most cases, the employee (who is compensated under the WSIB or WCB) will receive better and longer benefits from the Board than they would be able to obtain from their employer – helping to ensure that they receive the support required before returning to work. For the employer, making the claim means that they will not assume the legal risks associated with “burying a claim”.

Staying Competitive Through Health and Safety and Effective Claims Management

Since claims are costly – but claims avoidance can be even more so, the best strategy for a business to keep a good compensation rating is through outstanding health and safety initiates and claims management programs.

In order to stay competitive, it is recommended that companies:

Implement comprehensive policies, procedures and standards when it comes to health and safety in your work place;

Take a proactive approach as a health and safety leader by participating in voluntary programs like Safety Groups in Ontario or Partners in Injury Reduction in Alberta. These programs are designed to assist you in building effective health and safety management systems.

Consider attaining a Certificate of Recognition (COR) – this is nationally recognized certification that is endorsed by participating members of the Construction Safety Associations (CFCSA);

Implement effective injury and return-to-work management programs that help reduce the amount of lost time you experience.

By making a commitment to employee health and safety, employers are benefiting both their workers and their own companies as a whole. Not only will employers be helping their employees remain healthy but they will also be protecting the profitability of their business.

If you would like more information on how you can avoid losing contracts because of costly workplace injuries, contact the team at TeksMed today.